NDB nurtures entrepreneurship in Sri Lankan Nylon Yarn Industry
The contributions made by individual enterprises towards the
development of an economy of a nation is substantial, hence an
entrepreneurial culture is essential for the sustainable development of
a nation. As such, NDB firmly believes that its contribution towards
nurturing such enterprises to thrive in their respective fields of
businesses, forms a significant part of its responsibility in partnering
with the national economic development.
In fulfilling its duty in this regard, NDB has been in the forefront
of nurturing entrepreneurship among Sri Lankans, by extending not only
the long-term financing required for the projects to be set up, but also
with a wide array of other financial assistance required for continued
success of such projects.
The textile and garment sector plays a pivotal role as a driver of
the Sri Lankan economy, where approximately 40% of the country's total
industrial export earnings are contributed by this sector. Having
identified textiles & garments as an important sector in the economy,
NDB has supported this sector through accommodating both long term and
working capital financing facilities to meet its funding needs. The
total value of the facilities granted by NDB to the textile & garment
sector as of present, forms a significant part of its total lending
portfolio.
During the first quarter of 2013, NDB's Project Finance Division
extended the financial support for a promoter with a dream to become an
entrepreneur by setting up a Nylon yarn manufacturing facility in Sri
Lanka.
Nylon yarn is considered as an important raw material, used in
garment manufacturing, glove manufacturing, upholstery and commercial
applications.
Marzook who has a wealth of experience in garment manufacturing and
particularly in nylon yarn manufacturing, approached NDB with a strong
belief in NDB's support to set up a Nylon Yarn Manufacturing facility in
Katunayake Export Processing Zone, under the name “Filotex Lanka (Pvt)
Ltd” (Filotex).
Currently, nylon yarn manufacturing in Sri Lanka, is a monopolistic
industry. The only company currently operating manufactures around 200
MT of yarn per month. However, the local demand for Nylon yarn exceeds
1,500 MT of nylon yarn per month. As such 87% of the Nylon yarn
requirement is imported, mainly from China.
The project envisaged substituting part of the imported Nylon yarn by
setting up a factory with an increased capacity.
Hence the existing factory building at Katunayake has been renovated
and cutting edge Twisting Machines and Texturising Machines have been
purchased. These machines are with German Technology and are more design
capable, efficient and require less maintenance and labour. Using
machinery with cutting edge technology, provides Filotex, a the
competitive advantage over both local and foreign competitors as well as
imports.
The production capacity of Filotex, would enable the country to save
direct foreign exchange of approximately USD 1.9 Mn per annum. In
addition, Filotex would also be able to create local employment
opportunities, thus contributing to the national economy through import
substitution as well as employment creation.
The new nylon manufacturing facility is expected to add 150 MT of
nylon yarn to the national production, increasing the total national
production to 350 MT, which is 23% of the local demand.
The total cost of the project was in excess of US$ 1.5 Mn and NDB,
granted a term loan facility for renovation the factory and purchase of
machinery and also facilitated establishing of Letters of Credit for
importation of machinery and working capital facilities. |